BRUSSELS, BELGIUM – ACT | The App Association welcomes the Commission proposal to establish the 28th regime in the form of a Regulation, while also highlighting continuing concerns over some provisions that would create more legal fragmentation.

‘We strongly support the goal of defragmentation of the Single Market and creating better conditions for European startups, scaleups, and small tech companies’, said Mike Sax, founder and chairman of ACT. ‘With the right design, many of the provisions in the 28th regime, from a single incorporation process to reforms to employee stock ownership rules, could bring positive change to the startup ecosystem in the EU’.

Positive provisions in the proposal:

  • One form and €100 to operate in any or all 27 Member States
    Establishment of a new legal incorporation form that would integrate with existing Member States’ national registers. Using the new form, companies will be able to incorporate online through an EU central interface one time rather than having to incorporate separately in 27 jurisdictions.
  • EU Employee Stock Ownership Plan (EU-ESOP)
    Establishment of ESOP rules is a powerful tool for startups and scaleups to attract and retain Europe’s most talented innovators.

However, to truly deliver on its promise the Commission should make some common sense amendments:

  • Create a central EU registry, starting when the Regulation enters into force
    The lack of a pan-European registry from the start of the regulation creates an unnecessary administrative burden and complicates the ultimate goal of the single form reform. Merely having a central submission portal is a half measure at a time when Europe needs bold action. A genuinely unified EU registry must be established, not as an afterthought, but as a foundational element of the regime.
  • Set up an EU-level adjudication path
    A non-binding recommendation to Member States on court jurisdiction is simply not enough. It leaves dispute resolution fragmented across 27 national courts and defeats the legal certainty that startups need. ACT calls on the Commission to replace this recommendation with a binding EU-level adjudication path, ensuring that companies incorporated under the 28th regime have access to a single, predictable system for resolving disputes.

‘Startups and SMEs want the Single Market to truly be single. The same principle should be applied to dispute resolution: for entrepreneurs, having a single court with jurisdiction reduces legal costs, freeing resources for investment in new products and services, job creation, and ultimately driving growth’, said Sax.

ACT and our members stand ready to work with policymakers to craft a final 28th regime regulation that brings real benefits to startups and SMEs, reduces fragmentation, and increases European competitiveness.

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About ACT | The App Association:
ACT is a global trade association for small and medium-sized technology companies. Our members are entrepreneurs, innovators, and independent developers within the global app ecosystem that engage with verticals across every industry. We work with our members to promote a policy environment that rewards and inspires innovation while providing resources that help small businesses raise capital, create jobs, and continue to build incredible technology.